Question 15 Bulluck Corporation makes a product with the following standard cost

Question

Question 15

Bulluck Corporation makes a product with the following standard costs:

The company reported the following results concerning this product in July.

The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.

The labor rate variance for July is:

$764 F

$764 U

$840 U

$840 F

Standard Quantity or Hours Standard Price or Rate Direct materials 3.5 grams $ 1.00 per gram Direct labor 0.7 hours $ 11.00 per hour Variable overhead 0.7 hours $ 2.00 per hour

Explanation / Answer

Labor rate variance = (Change in rate)*Actual hours

= (11.40 - 11)*1910 = 0.40*1910 = 764(U)

So, answer is 764(U)

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